Poorer households grow faster on average but bear much more risk. Using Lorenz curve data from 53 countries over 50 years, we find no evidence that this greater risk is related to globalization.

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Abstract

“Globalization” implies change, and uncertainty over future change may affect household welfare. We use 50 years of Lorenz curve data from 53 mostly developing countries. Treating each country-quintile-year combination as an observation, we first account for variation in consumption expenditures, finding that global shocks matter less than country-level shocks in explaining consumption growth variation. While poorer households experience faster consumption growth than wealthier ones, they also face significantly more risk. However, we find no evidence linking this greater risk to globalization.

BibTeX

@Article{	  ligon06,
  author	= {Ethan Ligon},
  title		= {Poverty and the Welfare Costs of Risk Associated with
                Globalization},
  journal	= {World Development},
  year		= 2006,
  volume	= 34,
  number	= 8,
  pages		= {1446--1457},
  doi		= {10.1016/j.worlddev.2005.10.013}
}